As we all know, we need vibrant agriculture in Scotland to support our rural economy, put food on our tables and deliver a range of benefits for society. We are a lucky nation, in that we have the land to ensure food security and we have men and women with the skills to work our land. Many of them have rented the land to grow food and deliver those other benefits and, of course, we have landlords who are willing to let out land for those purposes.
Tenant farming continues to play a vital role in our country. Generations of tenant farmers, often representing the same family on the same land, have worked hard and contributed to our country’s success. Scotland’s total agricultural area represents 79 per cent of Scotland, and tenanted land makes up around a quarter of that, making it a crucial part of Scottish agriculture.
Tenant farming, however, like every other sector, has to cope with change and challenges. Since 1982, there has been a 42 per cent decrease in tenanted land in this country, and we now have one of the lowest proportions of tenanted land anywhere in Europe. Given that securing a tenancy is often the gateway to a career in farming, we are in danger of closing the door on future generations unless we act. One of the big challenges that we face is our ageing farming population, with 57 per cent of occupiers of farming businesses currently over the age of 55.
Therefore, to ensure that tenant farming thrives in the 21st century, steps must be taken to protect the sector’s vital role. Despite the progress of previous reforms to agricultural holdings legislation back in 2003 and subsequent legislation that was brought in by the current Government, there is a continuing decline in tenanted land. That is why, at the Royal Highland Show in 2013, I announced a fundamental review of agricultural holdings, with the aim of coming up with solutions to reverse that decline. Today, I am announcing the outcome of that review.
The remit was challenging, so it was essential to get the right people for the job. Sir Crispin Agnew, Barbara Brown, Hamish Lean, Iain Mackay, Jeff Maxwell and Andrew Thin brought their talents, expertise, passion and enthusiasm to the table, and I could not have asked for a better team.
From the beginning, the review group was clear that we needed to talk to people on the ground and bring the industry with us. Since the initial call for evidence in February 2014, the review group has held 78 meetings across Scotland. The members are grateful to all those who made time to share their views and experiences, as the group travelled from Bute to Blair Atholl and many places in between, while of course enjoying all the home baking and cups of tea round the tables in farmhouses.
We have benefited from hearing at first hand of the problems and issues facing the sector. For example, there is the aspiring new entrant who cannot get a tenancy to provide a secure base for his business and young family, or the tenant who wants to retire but cannot do so until he has resolved a stand-off with his landlord over waygo compensation. However, there were many strong signs of success and innovation too, such as a young tenant and his landlord who overcame initial concerns and barriers to increase the holding and secure significant funding to grow a dairy business. To back up what we heard, robust research was carried out, as well as wide-ranging surveys of the sector.
Last June, we reflected on what we had heard and published our interim report, which set out our vision and how we planned to develop our recommendations. Since then, we have developed our thinking and undertaken 12 public meetings across Scotland.
Today, we publish the final report of the agricultural holdings legislation review group. It is a significant package of 49 recommendations that has the potential to be a turning point for the tenanted sector in Scotland and to secure a vibrant future for those working in the sector. It is bold and radical. The recommendations aim to get to the heart of the matter and to address the three underlying issues that affect the sector and that the group decided are the key issues. The first is the need for stronger and more productive relationships, the second is the need to address the right-to-buy debate and, finally, there is the need to provide opportunities for new entrants and a framework for the sector that is fit for the 21st century.
Strong relationships are the foundations on which success is built—relationships with the land, the community and, most fundamentally, between tenant and landlord. Around 82 per cent of tenant farmers report having a good relationship with their landlord and 89 per cent of landlords agree. That shows that much of the sector is working. However, others describe relationships as poor—sometimes, very poor or non-existent—which highlights the point that there are still issues to be addressed.
Those issues are not insurmountable. The solutions will require effort and compromise from both sides. We have seen great examples of that already. In fact, one of the success stories of the past year or so was the facilitation of the industry-led rent review initiative, which highlighted that the power to resolve relationship issues often lies as much with the sector as it does with the Government or legislation.
Nonetheless, the review group’s recommendations are aimed at ensuring a strong role for the Scottish Government in working with the industry to promote better relationships by, for example, providing better support, guidance and oversight of the sector through the establishment of a tenant farming commissioner and robust codes of practice and by designing a clearer, fairer process for setting rents based on the productive capacity of a holding, which will minimise disputes.
As I made clear when I announced the review, it is not possible to have a meaningful discussion on the future of the sector without addressing the right to buy.
Over the past 18 months, the review has facilitated an honest and frank debate that has helped to identify the reasons behind calls for an absolute right to buy. The group identified: a loss of confidence in the system; concern over the lack of investment by landowners and the inability of tenants to realise their own, often substantial, investments; and a general feeling of imbalance in the rights and responsibilities of tenants and landlords under the Agricultural Holdings (Scotland) Act 1991.
We identified those as the key underlying issues, and the majority of the report’s 49 recommendations—such as the widening of succession rights to secure a future for 1991 act secure tenancies—are aimed at addressing them.
However, it is clear that there are some cases in which tenants feel that relationships have deteriorated to a point of no return and that a right to buy is the only solution and in the public interest. Therefore, the report proposes a range of measures to enhance the right to buy including: strengthening the pre-emptive right to buy by removing the requirement to register; enabling 1991 act tenants to apply to the Scottish Land Court to force the sale of the holding where a landlord does not meet their obligations; and further consideration of how any proposals taken forward in the proposed land reform bill could assist in addressing the issues that tenant farming communities face.
Those radical proposals have the potential to provide tenants with a solution to escape the clutches of bad landlords but pose no threat to the vast majority of landlords who have good relationships with their tenants.
Life, like tenant farming, is built on mature compromise and a focus on the path ahead. We all need to look forward to the many opportunities that lie ahead and to ensure that the tenanted sector is fit for the 21st century.
The review group is determined that tenant farming should play an important role in providing: routes for new entrants; security and flexibility for established businesses; and a dignified exit for older farmers. Its vision for letting vehicles and a legislative framework that are fit for this century will help to make the changes that are needed to make the most of the opportunities that lie ahead. Its recommendations are intended to provide greater flexibility, more innovation, more investment, more land and better security, by providing for the conversion of a 1991 act tenancy into a 35-year limited duration tenancy to be assigned on the open market and by replacing short limited duration tenancies and LDTs with a new, modernised, assignable limited duration tenancy with a minimum term of 10 years.
The group has also proposed innovative and groundbreaking tenancy apprenticeships through share farming to help remove the barriers that new entrants face when trying to access land. For those who have some capital but lack land, the report proposes potential new vehicles to enable tenants to take on a greater share of fixed equipment and repair and maintenance obligations in return for a minimum 35-year term and rents based on productive capacity.
Those proposals have the potential to be game changing and to deliver greater, much needed equality and diversity within the sector.
For some things to improve, people need to accept change and adapt to today’s environment. That is not always easy, but it is essential for the members of the tenant farming community to use the recommendations to make a real change to their lives and to their communities.
I am confident that the landmark report does indeed represent a turning point for the sector. We need a strong, vibrant, flexible sector where tradition and experience are respected, where new ideas and new investment are encouraged, where farming businesses are built on the principles of shared endeavour for mutual gain, and where landlords and tenants respect and value the contribution that both can bring.
In this, the Burns supper season, we remind ourselves that our national bard was an 18th century tenant farmer. Maybe not all landlords and tenants
“Shall brothers be for a’ that”,
but we must work together to ensure that the sector thrives in the 21st century. I commend the report to Parliament.